European stocks higher but debt worries persist; DAX up 0.54%

Investing.com - European stock markets edged higher on Thursday, but gains were limited as sustained concerns over the economic outlook for the euro zone continued to weigh on investor confidence.

During European morning trade, the EURO STOXX 50 added 0.17%, France’s CAC 40 rose 0.53%, while Germany’s DAX 30 advanced 0.54%.

Stocks were hit on Wednesday as the cost of insuring Spain’s debt against default climbed after a disappointing government bond auction added to concerns that Spain may be the next euro zone member to require a bailout.

Market sentiment also weakened after data confirmed that the euro zone service sector contracted for the sixth time in seven months in March, while retail sales fell by 0.1% in February, against expectations for a 0.1% increase.

Financial stocks were broadly higher, led by Dutch lender ING Group, up 1.81%. France’s BNP Paribas and Societe Generale also rose 0.60% and 0.81%, while German lenders Deutsche Bank and Commerzbank climbed 0.68% and 0.50% respectively.

The telecom sector also contributed to gains as Siemens group saw shares advance 0.88%, while Nokia Finland and Philips jumped 1.30% and 1.28%.

Earlier in the day, Nokia announced that it was launching a new mobile TV service based on its Lumia smartphones.

Meanwhile, shares in the Lufthansa airline company climbed 1.04%, erasing Wednesday’s losses after a German court ruled in favor of a night flight ban at Frankfurt airport, Europe's third busiest.

In London, FTSE 100 added 0.22%, supported by strong gains in the financial sector while markets eyed the release of reports by the Bank of England on its asset purchase facility and benchmark interest rate.

Shares in Barclays surged 1.34% and the Royal Bank of Scotland jumped 1.34%, while Lloyds Banking climbed 1.08%.

HSBC Holdings, on the other hand, saw shares decline 0.47% as it was preparing to argue against the liquidator of Bernard Madoff’s firms’ appeals of judges rulings that rejected about USD30 billion of his claims.

Mining giants Rio Tinto and Bhp Billiton were sharply higher, with shares rising 1.18% and 0.87%, as were copper producers Xstrata and Kazakhmys, up 1.14% and 2.14%.

On the downside, BP shares edged down 0.07% amid ongoing reports that the oil company is accusing the U.S. government of withholding evidence that would show the oil spill from the Macondo well in the Gulf of Mexico was smaller than claimed.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.18%, S&P 500 futures signaled a 0.21% increase, while the Nasdaq 100 futures indicated a 0.28% gain.

Later in the day, Germany was to publish official data on industrial production, while the U.S. was to publish government data on unemployment claims.